Each year, a sponsor of an employee benefit plan that is subject to the Employee Retirement Income Security Act (ERISA) must file certain information with the government. Essentially, ERISA requires the filing of certain forms used to report and disclose information concerning employee benefit plans to the Department of Labor (DOL), the Internal Revenue Service (IRS), and plan participants and beneficiaries on an annual basis.
Among the ERISA requirements, plan administrators of employee benefits plans are required to file a Form-5500 in regard to the proper operation and management of the employee benefit plans. Each Form-5500 may be filed in one of three ways: (1) electronically, (2) via a paper form that incorporates computer-generated two-dimensional bar code that encodes each answer on the form, and (3) via a special paper form that is printed in an optical character recognition format. The DOL/IRS processes these filings and creates an electronic database of all Form-5500 filings for each year. The freedom of Information Act (FOIA) has made available these Form-5500 filings with the DOL/IRS available to the public.
It is known that completion of these ERISA forms such as the Form-5500 requires significant effort. Almost all administration of employee benefit plans is performed by third party administrators and advisors (collectively “TPAs”) which are not affiliated with the employer sponsoring the employee benefit plan, hereafter referred to as a “plan sponsor” (although a few plans are self administered by the plan sponsors). The TPAs generally rely on software configured to establish, administer, and terminate employee benefit plans (collectively referred to as “employee benefit software”).
However, known employee benefit software packages have certain drawbacks. For example, known employee benefit software packages generally require at some point that the user complete a checklist that includes questions about the employee benefit plan. The user generally must perform a certain amount of due diligence to obtain, as well as manually enter, this requested information into the employee benefit software package. Typically, this requested information is obtained through inquiries to the plan sponsor and its advisors. This employee benefit information is otherwise obtained by searching for, obtaining copies of, and manually transferring information from paper copies of previous Form-5500 filings. The data entry is time-consuming, tedious and prone to error. Moreover, copies of previous Form-5500 filings are often difficult to obtain where there is a turnover of the previous TPAs that were administering the plans such that a new TPA must obtain plan information from other sources.
Therefore, there is a desire for an enhanced system for and method of preparing an employee benefit plan that simplifies the search for, possession, and entry of requested information in accordance with ERISA regulations.